Under new policy, a ‘systemically important financial institution‘ would only get liquidity support from the government

Federal Reserve Vice Chairman Stanley Fischer defended the central bank’s postcrisis policies designed to wind down big banks without requiring a taxpayer bailout, arguing that failed large institutions would in the future be recapitalized by their private-sector creditors, not the government.

Speaking at a conference in Stockholm, Sweden, Mr. Fischer addressed the growing number of critics who say the Fed’s policies to end the “too big to fail” problem are too complex and insufficient.